The IT spending in India is estimated to record a double-digit growth of 11.1 per cent in 2024, totaling $138.6 billion up from $124.7 billion last year. During the year, worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8 per cent from 2023.
The overall IT spending growth rate for 2023 was 3.3 per cent, only a 0.3 per cent increase from 2022. This was largely due to change fatigue among CIOs. Momentum will regain in 2024, with overall IT spending increasing 6.8 per cent, according to research firm Gartner Inc.
India’s IT spending (in $ millions)
“Spending on IT services in India is projected to grow 13.4 p.er cent, up from 10.1 per cent in 2023. Due to a lack of internal skills, Indian businesses are looking to partner with external providers in areas such as AI, industry cloud, security, and data analytics, resulting in the expected growth of IT services spending in 2024,” it said in its forecast for 2024.
“The spending on devices is expected to rebound in 2024 as Indian consumers expect to increase their spending when replacing their mobile phones and other devices this year,” it said.
“The projected growth rate of 6.8 per cent for global IT spending is down from the previous quarter’s forecast of 8 per cent growth. While generative AI (GenAI) had significant hype in 2023, it will not significantly change the growth of IT spending in the near-term,” it felt.
Change fatigue
Even with the expected regained momentum in 2024, the broader IT spending environment remains slightly constrained by change fatigue among CIOs. Change fatigue could manifest as change resistance — with CIOs hesitating to sign new contracts, commit to long-term initiatives or take on new technology partners. I
“For the new initiatives that do get launched, CIOs require higher levels of risk mitigation and greater certainty of outcomes,” it said.
“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” John-David Lovelock, Distinguished VP Analyst at Gartner, said.
“2024 will be the year when organisations actually invest in planning for how to use GenAI, however IT spending will be driven by more traditional forces, such as profitability, labour, and dragged down by a continued wave of change fatigue,” he said.
Lion’s share from IT services
IT services will continue to see an increase in growth in 2024, becoming the largest segment of IT spending for the first time. Spending on IT services is expected to grow 8.7% in 2024, reaching $1.5 trillion.
“This is largely due to enterprises investing in organisational efficiency and optimisation projects. These investments will be crucial during this period of economic uncertainty,” it said.
“Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room for only incremental growths, so being surpassed by software and services was inevitable,” Lovelock said.
“Enterprises continue to find more uses for technology – IT has moved out of the back office, through the front office and is now revenue producing, until there is a plateau for how and where technology can be used in an enterprise, there cannot be a plateau in enterprise IT spending,” he said.
